5 things you need to know about Making Tax Digital for Income Tax (MTD IT)?

Big changes have arrived in the way millions of people report their income tax. If you're self-employed or a landlord, Making Tax Digital for Income Tax (MTD IT) may already affect you — or will soon. Here's what you need to know.

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1. What is MTD IT and what does it involve?

Making Tax Digital for Income Tax is part of HMRC’s move to digitise the UK tax system. Instead of filing a single tax return once a year, affected individuals must:

Keep digital records of their income and expenses
Submit cumulative (year-to-date) updates to HMRC every quarter
Complete a final declaration at the end of the tax year

HMRC’s aim is to reduce errors and make tax reporting more accurate and efficient - but it does mean a change in how you manage and report on your finances.

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2. Who is affected?

Since 6 April 2026, MTD for Income Tax applies to individuals who are:

Registered for Self-Assessment, and
Earning more than £50,000 a year from self-employment and/or property

If your income from these sources is over £30,000, you'll be brought into the system from April 2027. A further threshold of £20,000 follows from April 2028. See the HMRC website for more information.

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3. HMRC isn’t issuing free software – so you’ll need to get your own

Under MTD IT, you must use compatible software to keep records and submit your quarterly updates.

Unlike the previous Self Assessment-only system, HMRC does not offer a free tool, and access to the existing gateway is being phased out for those mandated into MTD IT. You’ll need to find software that works for your needs – and make sure it’s recognised by HMRC.

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4. What do you have to do?

Here's a quick overview of what's required under MTD IT:

Maintain digital records of your income and allowable expenses using approved software
Send cumulative (year-to-date) updates to HMRC every three months – even if you’ve made no profit or had no activity
Submit a final declaration after the end of the tax year, replacing the current Self Assessment return

This means more frequent interaction with HMRC, but it also gives you a clearer picture of your tax position throughout the year.

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5. Introducing TaxNav – try it for free

TaxNav is one of the HMRC-recognised software tools built specifically for MTD IT.

TaxNav is built for people who rent out property or work for themselves. It's:

Fully browser-based – no downloads needed
Compatible with Excel spreadsheets
Designed to guide you step-by-step through MTD IT, including those all-important quarterly updates and final declaration

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How to get MTD-IT ready

If you haven't started yet, don't panic. Focus on these basics as, once those are in place, everything else follows naturally.

Confirm if your gross income will trigger the MTD IT rules with HMRC's page
Register with HMRC for MTD IT before you begin.
Select your software - TaxNav offers a 30-day free trial
Start keeping and recording your digital records - for example, directly into our software or in a spreadsheet using our bridging software. Until your final return, this does not need to be 100% accurate.
Diarise when you need to submit your quarterly updates, TaxNav will remind you.
Diarise your final (annual) declaration deadline

People with income over £30,000 from self-employment and/or property will need to join MTD IT from April 2027. You can, however, volunteer to join early and get familiar with it before your HMRC deadline.

With TaxNav you automatically get a 30-day free trial and we offer low-cost subscriptions to keep things affordable. An annual subscription is £60+VAT or pay as you go for £6+VAT per month.

Explore and try out our user-friendly MTD IT software

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